EDU Articles
Learn about investing, trading, retirement, banking, personal finance and more.
What is a Monte Carlo Simulation?
Monte Carlo Simulations can help investors project future values and the impact to portfolios from market movements and cash flows.
A Monte Carlo Simulation outlines the many possible outcomes of a situation with random variables, as well as the probability that any particular outcome will occur. It is used in a wide variety of professional fields from finance to engineering and even astrology.
The technique has many applications in finance and is commonly used to help predict the future value of an asset when there are multiple variables involved.
In financial planning, Monte Carlo Simulations are most often by investors trying to ascertain how a variety of future market conditions may affect a portfolio's growth and ability to produce cash flows.
The Monte Carlo Simulation will produce a “probability of success” that your portfolio survives.
How Do I Determine the Right Mix of Assets?
What is Backtesting?
What is Volume Weighted Average Price (VWAP)?
Volume Weighted Average Price (VWAP) is a calculation which brings the influence of volume into consideration when trading
How should my strategy change with age?
You can afford to be very aggressive when you’re young, and gradually become more conservative as you grow older
How Often Can I Contribute to My 401(k)?
Contributions to a 401(k) account are generally taken out of compensation during payroll, before taxes are withheld
What is the Consumer Price Index (CPI)?
The Consumer Price Index (CPI) is a measure of the average change, over time, in the prices paid by urban consumers
What is a Balance Sheet?
A company's balance sheet gives a picture of how all the assets, liabilities, and equities of the company "balance out"
What is a Quick Ratio?
The quick ratio is a financial ratio used to measure how well equipped a company is to meet its short-term liquidity needs
What is the Law of Demand?
The Law of Demand states that as prices increase, demand will decrease, and vice versa. That is to say, inversely related
Will My Pension Payments Affect My Social Security Payments?
Your pension comes from your employer, and Social Security comes from the government. However, your tax liabilities might
What is the CME?
The Chicago Mercantile Exchange, now known as the CME group, is the largest derivatives exchange in the world
What is Dividend Selling?
Even if you are in the seller’s position in this situation, and are seeking to “capture” the dividend, you have to...